Tom Poje

if I recall correctly, the comp used for safe harbor purposes need only satisfy 414(s), so if the HCE comp is the only one limited I would guess that would pass the smell test.

yes, under the safe horror....er... harbor rules for hardship withdrawals if loans are available they are suppossed to be used first. however, I've seen it argued, a person seeking such a loan could be considered a bad credit risk and therefore denied a loan since they won't be able to pay back the loan.

a few years ago, back when I was on the Q and A committee I posed the question and the one IRS agent looked at me funny, as if to say "it is in the regs. its 3 %." he grabbed the book off the wall and looked and did a double take (I think it's buried in most people's minds its 3% and only 3%) dang it, make me look it up 2007 ASPPA Conference Q17) Safe Harbor 401(k): For the safe harbor nonelective contribution, does the document or notice have to specify the exact percentage or can it simply say “at least 3%,” giving the employer to contribute a larger contribution if it so desires? A: The safe harbor matching contribution formula must reflect the exact percentage. The nonelective contribution formula may be expressed as “at least 3%.”

They didn't have color back then. Ted Turner must have colorized the pictures previously, but I guess he didn't this year.

just to clarify: provided it also satisfies the other requirements for a safe harbor...e.g. notice is provided, distribution restictions apply, etc. but merely providing a 5% nonelective 100% vested contribution does not satisfy safe harbor. the regs simply say "at least 3%..." and I've actually seen a document say that, giving the plan the option of providing more

appears to fail: 1.401(a)(4)-8(b)(1)(iv)© regular intervals if each band, other than the band associated with the highest age, years of service, or age and service points is the same length.

"there is actually a disadvantage to repaying the loan (in terms of how much money they would net). Is that correct?" this depends on what type of time frame you are talking about. Even though a loan is defaulted on the books it continues to accrue interest. so 10 years from now the person max loan would not be 50000 - the 12000 defaulted, but rather 50,000 - (12,000 plus interest) (despite the fact that 'interest' doesn't show up any where else!")

hurray. looks like Dave has worked out the kinks, at least some of them!

Dave is working on these issues....(which was why things were shut down for awhile)

talked with one of the 'powers that be' on the Q and A staff (not IRS power but ASPPA memnber) and asked if I could ask him about one of the responses regarding safe harbors that was in the Q and A.. In fact, he said 'by all means' but then hearing my question, he said they would rather not address the issue at this time. they were happy to be making what in-roads they could and didn't want to push it that fast. (so ASPPA folks still take a cautious stance on amending a safe harbor) .............. here is one of the issues there is nothing in the regs that permits issuing a new notice during the year (except in the case of terminating a safe harbor) looking at the Q and A items mentioned this year, none would have been directly in the safe harbor notice. (e.g. #37 bringing new people in) - eligibility requirements are not an item mentioned on the safe harbor notice (or at least, it certainly doesn't have to be) while logically you wouldn't think changing vesting 'upward' would matter (it seems silly you can't change something to benefit employees), that is an item specifically required to be mentioned in the notice, so perhaps that is one of the concerns of the IRS.

Tom doesn't do IRAs and had absolutely no clue, but I was curious enough to try to see what was out there. even a blind pig can find an acorn once and awhile!

other articles exist, but here is a discussion on the issue and how it works http://www.giftlaw.com/article.jsp?WebID=G...71&D=200809

hmmm. are you implying he had beans for lunch? "BG's cape still flaps in the wind" all kidding aside, I also have problems looking at the Retirement Plan Newsletter currently it shows 10/31 I can go under the archive and get letters through 11/5 and then if I hit refresh 11/6 will show up.

this may sound silly, but if you had to amend a 5500 by the actual filing deadline, then it would be impossible to file an amended return for a prior year. but the instructions indicate you can file an amended return for a prior year. this is slighty different than, say filing a form 5500 and not including an attachment (which would be incomplete), and later filing an amended form including an attachment (trying to 'bend' the rules) A few years ago with a 403b we filed the form with an attachment indicating the auditor's report was not read and indicating Q XX of the Q and As indicating this was permissible, and the client was aware there could be penalties. We received a letter indicating a new deadline for completeing the filing (it was the first year for the 403b as we pointed out as one of the reasons for the delay.

here is what I have in my notes (it really depends on the document) 5 year rule: Benefit must be completely distributed within 5 years of the death. IRC § 401(a)(9)(B)(ii), Treas Reg § 1.401 (a)(9)-3, Q&A-2 The ‘5 years’ extends to the end of the calendar year (December 31) e.g. EE dies January 1, 2003. 5 years is January 1, 2008, extended to December 31, 2008. Does not matter who the beneficiary is. If no beneficiary specified, and document does not contain a provision, must use this method Treas Reg. § 1.401 (a)(9)-3, Q&A-4(a)(2) Or see Publication 575 Life Expectancy Rule: Makes a difference if beneficiary is spouse! Non-spouse: must start receiving payments by December 31 of the calendar year following the calendar year the participant died. IRC § 401(a)(9)(B)(iii), Treas Reg § 1.401 (a)(9)-3 Q&A3(a) Spousal exception: 12/31 of year participant would have turned age 70 ½ (or, if later, must start receiving payments by December 31 of the calendar year following the calendar year the participant died). If beneficiary specified, and document does not contain a provision, must use this method Treas Reg § 1.401 (a)(9)-3, Q&A-4(a)(1)

These are my notes from a distribution talk I gave a few years ago regarding missed min distributions It's not my job to run the train. The whistle I don't blow. It's not my job to say how far, the train's supposed to go. I'm not allowed to pull the brake, or even ring the bell. But let the damn thing leave the track, And see who catches hell! well, all kidding aside 1.You can’t ask for the penalty to be waived until you have actually taken the distribution. This is proof you are trying to fix the situation as soon as possible. so make the distributions. 2. Fill out form 5329 3. Write letter begging for mercy, explaining the reason you didn’t receive the minimum distribution was the incompetence of the investment house or something similar. include copies as proof that the distribution has been made. By the way, years ago, it was required to send in the 50% penalty and hope the IRS would have leniency and waive the penalty and return the money. Now simply send in the letter with the Form 5329, and if they don’t accept your 'lame' excuse they will bill you. good luck.

as i recall, the issue that was addressed there was a plan that failed ADP. corrections were made so it now passes the 2 test. then could you shift and the answer was yes. this is different in which you are starting with a premise that a QMAC is made to the ACP test. again, unless the document was specific, the initial QMAC could have been made to the ADP test, so at that point you aren't shifting to the ADP test as you put forward but I would also agree with earlier comments that you couldn't use the QMAC in both tests, the regs are clear on that.

besides sounding like a greatly contrived example... which is fine because many times that leads to good discussions. since no mention was made of QMACs to the HCEs that implies the following HCE ADP 7.0 NHCE 4.1 HCE ACP 2.0 NHCE 0.0 (so no was eligibile for a match) then they make a QMAC of .9 unless the document was specific (and I recall one from years ago that indicated a QMAC would be made, and it would be used in the ADP test) then you could have used the QMAC in the ADP initially. at that point yes you would pass ADP, and by shifting deferrals only (none of the match) it looks like you could pass shifting deferrals only. but I wonder if you could actually shift deferrals. while its true it is generally only done on paper, one still has to be eligible to receive a match to shift that individuals deferrals. (as answered at an ASPPA conference a few years ago) since no one was eligbile for the initial match that might be a problem (even though magically the people are eligible for the QMAC. that might not pass the smell test. But lets suppose the entire match was a QMAC including HCEs. Then how would some end up in the ACP test (HCEs only) and the rest in the ADP test (NHCEs only) that is also rather convoluted and it begins to smell as well.

basically things were pretty well shut down in DC the last few days, so nothing was brought up about the issue at the Conference. (They did good to get an IRS body to make it to the Q and As from what I've heard. As with other natural disasters, I'm sure there will be something special that will come out soon for those in the effected areas.

Someone I talked to at the ASPPA Conference indicated a couple hundred people were unable to attend (over 1500 were scheduled to attend). I had flown in Sunday morning and at that time the only major problem was that a bunch of the roads were closed due to the marathon that was taking place. It rained all Monday, off and on Tuesday. My morning flight Wednesday was cancelled. The hotel 'discovered' a number of leaks on the ground floor due to all the blowing and rain and everything else. Many businesses close to the hotel were closed as well. Looked absolutely nasty gazing out upon the harbor.

well, next week I'm off to "confer, converse, and otherwise hob-nob with my brother wizards." well, ok most of them are wizards at what they do, I'm still trying to learn. Hope to see some of you there.

not sure if it's quite what you are looking for but Q and A 9 from Corbel says http://www.relius.net/News/TechnicalUpdates.aspx?ID=432 9. May an employer terminate a safe harbor 401(k) plan and retain safe harbor status for the short plan year? Yes. If the employer terminates the safe harbor 401(k) plan because: (1) the employer incurs a substantial business hardship that satisfies the pension plan funding waiver requirements, or (2) the employer is involved with an acquisition or disposition that satisfies the requirements of Code §410(b)(6)©, the plan continues to qualify for safe harbor status for the short plan year in which the plan terminates. The regulations do not impose an advance notice requirement to terminate a safe harbor 401(k) plan under either of these two circumstances. Example: SNA acquires the stock of LTD as of June 1, 2009. LTD terminates its safe harbor 401(k) plan as of the date of the acquisition. LTD funds the plan through the date of the termination. The plan is a safe harbor 401(k) plan for the short plan year since it terminates because of an acquisition transaction.

you better be ready to run up to the mike and be ready to pose follow up questions because the handout notes add a comment "as long as there is no effect on the already eligible employees" I don't see how you could change a profit sharing formula (or amending to add a group of employees) without effecting an already eligible employee. you could end up reducing an individuals profit sharing as a result.

agreed. I suspect the call is actual, but as to be a set-up either by all parties involved or just the caller - hard to tell. irregardless, it is well done and funny. if it really is legitimate then, well, what can you say.

yes oh I suppose you want the answer as well. It's actiually in the instructions your first kid or if that is not an option then $1/day/particpant not reported, max $5000 unless you have a good excuse...er reasonable cause. $50 for not providing participant notice (instructions are specific - 'willful failure to furnish the statement')